An Ugly News Roundup

Posted by Tom Lindmark on November 10th, 2008

Here’s a quick roundup of some interesting bits of news.

The WSJ is reporting that the Fed has approved on an expedited basis a request by American Express to become a bank. The move of course is being taken to allow American Express access to the various Fed facilities. AmEx has been bleeding badly due to credit card losses and has warned that they will get worse. So now they just stroll up to the Fed window and trade the bad paper for a loan. As a sports broadcaster in Phoenix used to say when the Arizona Diamondbacks would botch a play, “Boy oh Boy.”

Housing Wire reports that foreclosures and pre-foreclosure actions were down 7% in October from September. The number of REO properties nationwide also fell by 22% to 84,286 houses. That’s the lowest number since May.

Experts say that the decline is most likely caused by local and state legislation as well as by lender actions to defer the foreclosure process. Massachusetts, for instance, instituted a 90 day right to cure ordinance in May and saw foreclosures drop precipitously. In September when the 90 day period began to expire, foreclosures soared by 460%. We can all hope the numbers mean something but odds are they don’t.

Landamerica Financial Group, one of the largest title insurance companies in the country, announced a $600 million for its third quarter. The company which is merging with Fidelity National Financial has effectively said it can’t go it alone. Now if they can just figure out a way to rationalize a banking license for the combined entity all will be well.

Speaking of nationalized companies, Housing Wire also reports that Fannie lost $29 billion in the third quarter. I recommend that you click through to the article for all of the nasty details. It’s actually worse than you might imagine. Just to give you a taste, Fannie’s non-performing loans reached $63.6 billion. At the end of the second quarter the number was $46.1 billion. Only a 38% increase in NPLs in one quarter. Ouch is much too mild a word.

So there you have it. Any ideas who will be left standing at the end of this?